The following report presents the preliminary conclusions of WG-A on
Chapter 3 of the WIPO Final Report dealing with Uniform Dispute Resolution
Procedures in the DNS. It is also intended to provide background
information about the creation of the WG to provide a context for the
preliminary conclusions, as well as to facilitate the participation of
those who wish to contribute their views but are either unfamiliar with the
background or new to the process. The issues raised in this report will be
open for public comment until July 24, 1999. At that time, WG-A will
proceed to prepare its final report for submission to the ICANN Board based
on the comments and input received to date.

I. Report on the Formation of WG-A:

At the conclusion of its Berlin meeting on May 27, 1999, the ICANN Board
adopted a number of resolutions, including a Resolution on the Report of
the World Intellectual Property Organization (WIPO). This Resolution
provides for the following, in part:

"WHEREAS, in the White Paper the U.S. Government called on the World
Intellectual Property Organization (WIPO) to develop recommendations
regarding trademark disputes concerning domain names;

WHEREAS, on April 30, 1999, WIPO submitted a report to the ICANN Board
containing numerous recommendations that resulted from an extensive
consultative process;

WHEREAS, the first ICANN-accredited registrars (testbed registrars), are
preparing to introduce competition in the provision of domain registration
services and accordingly are required soon to implement dispute resolution
policies;

....

FURTHER RESOLVED, the ICANN Board refers the recommendations in Chapter
3 of the WIPO report (with associated annexes) to the ICANN Domain Name
Supporting Organization (DNSO) for recommendations the DNSO [sic], to be
submitted to the ICANN Board by July 31, 1999;

FURTHER RESOLVED, the ICANN Board requests that by July 31, 1999 the
DNSO submit to the Board any other recommendations the DNSO may have
concerning a uniform dispute resolution policy for registrars in the .com,
.net, and .org TLDs; "

The Provisional Names Council (pNC) held its first informal meeting in
Berlin on May 27, 1999 at which Jonathan Cohen was asked, as the Interim
President of the Intellectual Property Constituency (IPC), to serve as
"focal point" for an online discussion on Chapter 3 of the WIPO report,
pending the formation of a formal Working Group (WG) to deal with the
issue, by the pNC at its next, formal meeting.

On June 2, 1999 Mr. Cohen distributed a request for comments among
members of the IPC and other pNC reps, (for re-distribution within their
respective constituencies) asking that a dialog be opened and comments on
Chapter 3 of the WIPO Report be circulated among the members of the DNSO
constituencies. Respondents were specifically requested to not merely
reiterate comments submitted to WIPO during its own RFC process, as those
comments were reviewed and incorporated into the results of that process,
but to make an effort to revisit and amend any prior submissions in view of
recent developments.

On June 2, 1999, Mr. Cohen also sent a request to all members of all
constituencies (through the respective pNC representatives) for the
submission of names of all those interested in participating in the WG on
Chapter 3 of the WIPO report. On June 4, 1999, Mr. Amadeu Abril i Abril was
asked to participate on behalf of the Registrar constituency as co-chair of
this WG.

On June 8, 1999, Mr. Cohen again addressed the other members of the pNC
and circulated the list of individuals from the IPC who had volunteered to
participate in this WG to date, and reiterated the request for volunteers
from the other constituencies. To initiate and/or facilitate discussion, he
further provided some commentary on the various schools of thought with
respect to WIPOs role in dispute resolution on the Internet, and
formulated four questions for discussion to focus the WGs inquiry
relating to Chapter 3 of the WIPO Report.

The first formal pNC meeting was held by teleconference on June 11,
1999, by which date a list of volunteers for this WG from the various
constituencies had been compiled. At the meeting, WG-A was formally
recognized by the pNC to address the issue of Chapter 3 on Dispute
Resolution of the WIPO Final Report. The questions proposed by Jonathan
Cohen as the basis for WG-As inquiry were accepted. WG-A was
initially composed of fifteen members, including co-chairs Jonathan Cohen
and Amadeu Abril i Abril. Results of this NC meeting, including the initial
list of members were posted at
<www.dnso.org/DNSO/notes/19990612.NCtelecon.html> on June 12, 1999.
It was further announced therein that: the WG was still open to members of
constituencies that were not yet represented in the WG and to other experts
invited by the co-chairs; that WG-A must present a report by July
7th which would be posted on the DNSO website for public comment
until July 24th; and that after that date, with the report and
the public comments, the provisional Names Council will prepare a report
that it will send to the ICANN Board on July 31st, the deadline
set by ICANN.

WG-A members were assigned on June 14, 1999 to sub-groups, each of which
was responsible for one of the four discussion questions. The initial four
questions and sub-group members were the following:

Question (a)

Should the WIPO dispute resolution process be confined to
cybersquatting / cyberpiracy, or should it be considerably expanded?

Peter Dengate Thrush

Jon Englund

Jonathan Cohen

Question (b)

Should there be a standard dispute resolution process throughout all
Registrars / Registries?

Amadeu Abril i Abril

Randy Bush

Hirofumi Hotta

Ken Stubbs

Question (c)

Should the dispute resolution process be voluntary or mandatory or a
combination of both?

Mike Heltzer

David Maher

Ted Shapiro

Luis H. de Larramendi

Question (d)

Should there be some method for contracting out of the right to seek
a court ruling if one undertakes to submit to the dispute resolution
process?

Susan Anthony

Mark Partridge

Dr. Willie Black

Kathy Kleiman.

The guidelines circulated by Mr. Cohen to the sub-group leaders and
members for carrying out their work were the following:

Immediately contact others in the group and agree on the rules,
tasks and timetables for completing research and providing an opinion on
the question.

If it is believed to be appropriate, subdivide or add a question to be
answered.

Real effort should be made to seek out opinions from groups,
individuals, regions or organizations that have not been previously
canvassed.

Review and briefly comment on the opinions given in the WIPO
RFCs and review the WIPO commentary and conclusions to determine if
there is a problem with either in terms of consistency or otherwise, and if
so, indicate clearly and concisely what the problem is and why.

Assess whether there is a WG sub-group consensus, and if so, give
it. If it differs from the WIPO recommendations, indicate why, giving the
basis of the difference, and if there is minority view, provide this also
with the reasons for the view and/or why it differs from the majority
view.

If possible, draft the recommendation to ICANN.

WGs are not limited to seeking opinions from DNSO members only. It is
important to canvass as broad a cross-section of opinion as possible,
particularly from participants outside of North America and in view of the
large number of individuals and organizations that were already consulted
during the WIPO process.

The ultimate goal is to define a WG consensus on these four questions
that is based on a broad cross-section of an informed group of people who
can do some novel and independent research on these issues.

With respect to WG-As progress as of June 25, Mr. Cohen reported a
limited response to his June 22, 1999 request for sub-group status updates,
with the exception of sub-group (c). In the first ten days of the WGs
operation, certain administrative and procedural difficulties appeared to
be causing delays in the sub-groups progress. Mr. Cohen indicated
that the ICANN Board had been made aware on June 22, 1999 of the problems
that may be caused by the accelerated schedule ICANN had imposed upon WG-A.

There was consensus at the pNC meeting that although WG-A had been asked
to complete its mandate within an extremely short time frame and without a
set of procedural guidelines or rules that would greatly facilitate all
aspects of WG activity, the balance of opinion was in favour of WG-A
proceeding with its work to the best of its ability in the time allowed,
which it has done.

II. Preliminary Conclusions of WG-A

The report which follows reflects the preliminary conclusions
of WG-A which are hereby posted for broad comment in the General Assembly
(GA) and beyond. It is intended to be the starting point for extensive
discussion by the DNSO GA on the questions considered by the members of
WG-A. Of the four sub-questions, the greatest progress was achieved in
sub-questions (b) and (c).

As dialog among WG-A members progressed, there was also the suggestion
that a fifth question dealing with procedural issues not properly within
the ambit of the initial four sub-questions ought also to be considered.
While a "formal" sub-group was not established for the purposes of
inquiring into such issues, this preliminary report also includes the views
that were expressed in this regard, following the discussion of the four
sub-questions. Members of the GA and all other interested parties are
invited and encouraged to propose and actively debate these and other
procedural issues.

Sub-question (a)

Should the WIPO dispute resolution process be confined to
cybersquatting and cyberpiracy or should it be considerably expanded?

There has been nothing reported to the sub-group that would suggest
there is a preponderance of opinion other than that reported by WIPO,
namely to implement its dispute resolution procedure on a mandatory basis,
but only with respect to bad faith and abusive domain name registrations
(cybersquatting / cyberpiracy).

Response to the sub-group has indicated a general view that the current
lack of harmonization of trade-mark laws throughout the world militates in
favour of limiting ADR to alleged cases of bad faith, fraud and
cybersquatting at the beginning. The point was made that it is extremely
unclear as to whether or not panelists will have expertise in the various
national trade-mark laws or international treaties, and the passage of time
will tend to indicate whether it is advisable to support adding to the role
of ADR panels. Until we have some experience with ADR panels it is
impossible to predict whether the resulting decisions from an overly-broad
ADR system will actually do great harm to the ongoing efforts in various
circles to foster this harmonization.

There is a minority view that it would not meaningfully change the
preponderance of opinion held by the majority if WIPO were authorized to
hear trade-name/trade-mark Internet disputes on a strictly voluntary basis
- e.g. where both parties agree and where both parties have the right at
any time to discontinue or to take action in the court of their choice, as
and when they see fit. A corollary to this is that the parties may of
course, as in any dispute resolution, voluntarily contract out of
the right to pursue their interests in a court or elsewhere at the outset
of the proceedings.

There is also a minority view that there should be no mandatory dispute
resolution even in relation to bad faith registrations, however the
majority feels strongly that the process would be fruitless if it is not
mandatory for bad faith registrations.

Sub-question (b)

The preliminary report of this sub-group will be posted separately
by July 8, 1999.

Sub-question (c)

Should the dispute resolution process be voluntary or mandatory or a
combination of both?

The following points of view were compiled by the members of sub-group
(c):

The benefits of a mandatory dispute resolution process are
unquestionable:

more uniform criteria;

speed in obtaining a decision (45 days) and in enforcement (7 days) -
something that would be difficult through the Courts of a great number of
jurisdictions, despite TRIPs;

clarity, transparency and dissemination of the decisions (assuming they
are published);

economy of efforts (it will be easier to prepare a complaint under a
dispute resolution system than under a discovery process or to prepare a
Court action where such a process does not exist) as well as economy of
costs;

dissuasive vis-a-vis those applying for domain names in bad faith who,
after a time, will find that the system always rejects their requests for
registration of domain names constituting abuses or bad faith, and who will
slowly stop requesting such names;

the drawbacks of a voluntary system are avoided, namely:

voluntary process is avoidable for those who act in bad faith;

delaying tactics are not difficult in a voluntary process;

there is no uniformity in a voluntary process.

There is agreement that mandatory ADR, particularly in cases of bad
faith
-cybersquatting - is the preferred approach to dispute resolution,
subject
to the proviso that an ADR decision would not preclude a party from
seeking
relief in court, and that the ADR decision would not be binding on a
court
having jurisdiction.
The new "universe" of the Internet, with global, trans-national
dimensions,
makes it nearly impossible to expect national courts to deal with
certain
disputes that are bound to arise. In pre-Internet days,
trademark disputes were more localized and were capable of resolution by
traditional national courts, but this is not necessarily the case now.
In the discussions leading up to the IAHC Final Report (2/97) and the
gTLD-MoU (5/97), this was considered at some length and it was concluded
that ADR
was essential for an orderly and efficient DNS. WIPO was heavily
involved in
these discussions, and a new form of WIPO ADR was proposed for
trademark-domain name disputes. The present WIPO recommendations are
very
similar to what was proposed in early 1997. Because of WIPO's concern
that
its powers, based on treaties, are limited, it was also concluded that
parties
involved in trademark-domain name controversies would retain the option
to
seek relief in the courts, assuming that a court having jurisdiction
over
all parties could be found. Thus, the decision of a WIPO ADR panel would
not
prevent a party from litigating the issue de novo.
In developing the structure of the Council of Registrars (CORE), it was
also
concluded that all disputes between or among registries (the databases),
registrars, and domain name registrants, should be subject to mandatory
ADR
under the UNCITRAL Arbitration Rules. It was recognized, of course, that
third
parties, not bound by contract with registrars or registries, could
seek relief in the courts.
The above discussion muddies the waters on the question of "mandatory"
v."optional", but it is suggested that there cannot be a hard and fast
choice for
all of the different types of disputes that may arise.
The optimism felt by those who believe that cyber-squatting is no longer
a real
problem is not shared by all, and it is suggested that the
"semi-mandatory"
availability of ADR (as described above) will go a long way to solving
continuing problems of cyber-squatting.

In the context of mandatory vs. voluntary arbitration, the issue of
registry jurisdiction was also raised. Registry jurisdiction would attach
at the registry level. It would allow a court in the Eastern District of
Virginia to have jurisdiction over all domain name disputes because the
.com, .net and .org registry is located at NSI's office in Herndon,
Virgina, USA. This would mean that if an Australian registrar registered a
.com domain name for a Zimbabwean registrant that violated a US trademark
holders' rights, the dispute could be adjudicated in Virginia since that is
where the registry is located. If a mandatory system for registrants that
will bind registrars is not possible, then registry jurisdiction might be
useful. It would seem that the area most deserving of focus is bad
registration information. Make the process faster, allow for provisional
remedies and this could solve a huge number of problems.

There are many supporters of the creation of an ADR procedure that
applies to all gTLDs and ccTLDs and requires the applicant to agree in its
registration agreement to submit to ADR. During the initial stages of the
system, ADR should be limited to cases of bad faith, fraud and
cybersquatting. However, any dispute resolution system alternative to
litigation that may be adopted for
domain name disputes should not deny the parties to the dispute access
to
court litigation.
Simply put, trial is expensive and, depending on what the other side
throws
your way, discovery can also be expensive, frustrating and time
consuming. Not to mention that litigation is risky. The system must be
quick, cheap and effective to discourage the bad-faith registrants - the
Court system is generally neither quick enough in Internet terms nor cheap
enough.

The copyright community was of the view that the dispute resolution
process should be mandatory in the sense used in the WIPO report (i.e. that
applicants must agree to the jurisdiction of the process for disputes
falling within its scope), but that the process must not preclude resort to
the courts or other resolution mechanisms (as WIPO also recommended).

There has been the view expressed by many people outside the United
States that having jurisdiction reside in the U.S. regardless of where the
disputants are, as in item 3 above, is unacceptable, since this would at
all times almost guarantee that any U.S. national would access to its
courts, whereas the same would not be true for non-U.S. citizens.

Sub-question (d)

Should there be some method for contracting out of the right to seek
a court ruling if one undertakes to submit to the dispute resolution
process?

The preponderance of opinion received to date indicates the following:
the copyright community on balance is in favour of the view that the
dispute resolution process should have no preclusive effect, although
parties certainly should be free to voluntarily forego resort to the
courts, by contract or otherwise. A significant segment of the trade-mark
community is of the view that nothing in the dispute policy should preclude
a party from utilizing the national court systems as appropriate.

Additional "Fifth" Sub-Question

Professor Michael Froomkin, of the University of Miami, School of
Law made the following comments:

it is unfair to make the procedure for notice to a domain name holder
who has submitted accurate contact information so much more onerous than
for one who has submitted false details. Ten days notice is arguably too
short in the best circumstances to put on a full defense (recall that "no
letter before action" is required in the WIPO process, hence no prior
notice...) When you make it ten days from the day the e-mail is sent, you
have a real potential for unfairness.

The following comments were submitted on behalf of the copyright
community (by the International Intellectual Property Alliance):

the main concern of the copyright community about the WIPO
recommendations has to do with the proposed timetable for acting on
complaints and implementing the conclusions of the dispute resolution
decisionmaker. From the viewpoint of commercial arbitrators, this timetable
is quite expeditious, but as viewed in the context of "Internet time" it is
unacceptably leisurely. Considerable damage can be inflicted by an
abusively registered Domain name in a very short period of time. If the
trade-mark holder can demonstrate a strong case of bad faith, as defined by
WIPO, it should be able to get immediate temporary relief, on an ex parte
basis, and a final decision (assuming that the cybersquatter cannot
overcome this showing of bad faith) within a few days, not 45 days as WIPO
recommends. Most, if not all, of these disputes should be resolvable
online, so there is no need to allocate many days for the delivery of hard
copy responses and rejoinders. By narrowing the scope of cases within the
purview of the dispute settlement procedure to those "abusive
registrations" cases that will often involve few factual or legal disputes,
WIPOs recommendations become even more conducive to the use of an
expedited procedure for almost immediate suspension of the domain name.

In addition, there is no reason to wait 7 more days before a dispute
resolution decisionmakers decision (e.g. to cancel or transfer a
registration) is implemented. The registration authorities can be notified
of the decision by e-mail and should be bound to implement it within 24
hours at most.

It is noteworthy that an "alternative" to the WIPO ADR process is
litigation - Article 50 of TRIPs (with which the court systems in most
countries with e-commerce must be in full compliance by January 1, 2000)
requires that courts have the authority to impose prompt and effective
provisional measures to prevent an infringement of any IP right from
occurring, and that they do so ex parte in appropriate cases. A judicial
procedure that delayed action for 45 days against a domain name
registration that blatantly infringed a well-established trade-mark, or
that denied any possibility for immediate suspension of the registration,
would fall far short of meeting this international consensus standard. If
the dispute resolution system envisioned by WIPO is to succeed, it must
meet the competition of "conventional" dispute resolution mechanisms, which
must meet TRIPS standards with respect to expeditious remedies and
provisional measures.

Comments of the GA and any interested parties with respect to all of the
above issue would be welcomed and are strongly encouraged by the members of
WG-A.

In view of the very limited time before the July 31, 1999 deadline, we
urgently request people to discuss, comment and debate and alert other
people to this as soon as possible so that as much commentary and
discussion can be received by the WG-A prior to their making their final
recommendations to the ICANN Board. This comment period will be open until
July 24, 1999. At that time, WG-A will formulate its final report to the
ICANN Board, due July 31, 1999 based on the submissions received to that
date from any interested party to this list.

Respectfully submitted:

by Jonathan Cohen, on behalf of Jonathan Cohen and Amadeu Abril i Abril